The chair of the accounting department wants to develop a regression model to
predict the grade point average in accounting for graduating accounting majors,
based on the students’ SAT score and whether the student received a grade of
B or higher in the introductory statistics course (0 = no and 1 = yes).
a. Explain the steps involved in developing a regression model for these data. Be
sure to indicate the particular models you need to evaluate and compare.
b. Suppose the regression coefficient for the variable of whether the student
received a grade of B or higher in the introductory statistics course is +0.30,
how do you interpret this result?
Answers
Design Thinking and Innovation at Apple and Starbucks: Delivering Customer Service. All cases are written with a learning objective in mind. The objective might be designed to impart knowledge, build a skill, challenge the learner, or develop an ability. After reading and analyzing the case, the student should know about something or be able to do something. An example objective might look like this.
(a) First develop a multiple regression model using X1 as the variable for the SAT score and X2 a dummy variable with X2 = 1 if a student had a grade of B or better in the introductory statistics course. If the dummy variable coefficient is significantly different than zero, you need to develop a model with the interaction term X1 X2 to make sure that the coefficient of X1 is not significantly different if X2 = 0 or X2 = 1.
(b) If a student received a grade of B or better in the introductory statistics course, the student would be expected to have a grade point average in accountancy that is 0.30 higher than a student who had the same SAT score, but did not get a grade of B or better in the introductory statistics course.